I am a HUD listing broker, which I love, but it also comes with some challenges.
One of those challenges is HUD likes to change the rules occasionally and we all have to learn a new system. HUD may or may not be changing their whole system soon, but they are making big changes that will certainly affect many of us.
Why Does HUD Change Their Policies?
HUD a part of the federal government and ultimately their goal is to return as much money to the taxpayers. HUD insures FHA mortgages and when they go into foreclosure they sometimes take over the property from the bank that loaned on the property. They make changes to their system that are supposed to improve the system and make HUD more money.
The most recent HUD policy change was the reduction of the FHA Insured owner occupant bid period from 30 days to 15 days. This happened the end of 2013 and was a great move in my opinion, because investors didn’t have to wait 30 days to bid. Here is much more information on the HUD home bidding process.
What New Changes Are Coming?
Big changes are coming for HUD in most areas of the country.
HUD uses multiple asset managers in different regions of the country to sell their houses. Those asset managers hire agents like me to sell those homes. HUD is going to ask for new proposals from asset managers for most parts of the county.
Basically the Southeast, Midwest and Northeast areas of the country will be rebid. In the new proposal there will no longer be multiple asset management companies in each state or region. There will only be one asset manager like there was in the old HUD system.
When Will These Changes Happen?
HUD was already supposed to ask for a RFP (request for proposal) in March from asset management companies.
They have not asked for it yet, because HUD likes to take their time. The Western regions were rebid last year and it took a very long time for the process to happen.
They were actually supposed to rebid the West 2.5 years ago, but due to protests and longer timelines it took two years for the rebid process to be completed. I was recently at a REO conference and their best guess was the contracts will be awarded in September, but I have my doubts.
Why Is This A Big Deal?
In the new system HUD is requiring almost all of the asset management companies to be small businesses.
That means none of the current asset management companies will be eligible. In fact a couple states are reserved for women owned, small businesses.
There will be a new asset management company with new agents and new policies for most of the country. I will have to resubmit my application to whoever the new company is. Hopefully I will still be a HUD listing broker this time next year and if not, then I can buy HUD homes again!
How do you think the new HUD changes will effect investors?
Share your comments below!